KUALA LUMPUR (Feb 8): MISC Bhd dropped as much as 10 sen or 1.3% after its 66.5%-owned subsidiary Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) said fourth quarter net loss widened to RM119.67 million from a year earlier.

Shares of shipping entity MISC fell to their lowest so far today at RM7.45. At 10:30am, MISC was transacted at RM7.47 with 44,300 shares traded.

MHB shares fell three sen to 98 sen at 10:34am. Petroliam Nasional Bhd (Petronas) owns 62.67% of MISC.

"MHB's net loss is one of the major reasons for the drop in MISC's share price today," Affin Hwang Investment Bank Bhd analyst Aaron Kee told theedgemarkets.com.

“But in our opinion, MHB does not contribute significantly to MISC’s earnings as MISC has a huge market capitalisation. We believe the drag on MISC’s earnings in financial year 2017 will come from its petroleum tanker sector as well as its liquefied natural gas sector,” Kee said.

Yesterday, MHB announced that net loss swelled to RM119.67 million in the fourth quarter ended Dec 31, 2016 (4QFY16) from a net loss of RM27.13 million. For the full year, MHB posted a net loss of RM134.3 million compared with a net profit of RM43.89 million a year earlier.

Today, analysts downgraded MHB on its latest financials. Kenanga Investment Bank Bhd analyst Sean Lim Ooi Leong wrote in a note that Kenanga cut its FY17 earnings forecast for MHB by 56.5% to RM16.8 million.

Lim said Kenanga also downgraded MHB shares to "underperform" with a lower target price of 96 sen.